Question

Be sure to show you setups for all the problems

1. Examine the computer output for Equation 1 modeling the number of cars admitted to the Blue Spruce Holiday Light Up Event. Extract and specify Equation 1 which will show Cars as a function of Price.

2. Predict the number of cars through the gate when the admission price is set at $6.

3. Now predict the number of cars through the gate when the admission price is set at $7.

4. Compute the arc price elasticity of demand in the range of prices $6 to $7.

5. Is demand elastic or inelastic in the price range $6 to $7.

6. Examine the computer output for Equation 2 modeling the number of cars admitted to the Blue Spruce Holiday Light Up Event. Extract and specify Equation 2 which will show Cars as a function of Price and average December Temperature.

7. Predict the number of Cars through the gate if the price is $8 and the average December temperature is 30 degrees.

8. Using Equation 1, what price should we charge to get the maximum total revenue?

9. Show or explain how you determined the revenue-maximizing price in the previous question? [There are several ways to do this. Think, explore, and try to find a way to figure it out.]

10. What percent of the variation in cars through the gate can be accounted for by variation in admission price and average December Temperature?

Dependent Variable	CARS
N	15
Multiple R	0.8298604
Squared Multiple R	0.6886683
Adjusted Squared Multiple R	0.6647197
Standard Error of Estimate	478.7469853

Regression Coefficients B = (X'X)-1X'Y
Effect	Coefficient	Standard Error	Std. Coefficient	Tolerance	t	p-value
CONSTANT	7,553.2334688	580.7547678	0.0000000	.	13.0058914	0.0000000
PRICE	-633.9414634	118.2181417	-0.8298604	1.0000000	-5.3624719	0.0001292

Dependent Variable	CARS
N	15
Multiple R	0.9203313
Squared Multiple R	0.8470097
Adjusted Squared Multiple R	0.8215113
Standard Error of Estimate	349.3071128

Regression Coefficients B = (X'X)-1X'Y
Effect	Coefficient	Standard Error	Std. Coefficient	Tolerance	t	p-value
CONSTANT	5,017.0284102	835.1434178	0.0000000	.	6.0073854	0.0000615
PRICE	-613.3296817	86.4533074	-0.8028786	0.9954233	-7.0943461	0.0000126
PITTDECT	73.4854826	20.8519046	0.3988350	0.9954233	3.5241617	0.0041912

Case	CARS	PRICE	PITTDECT
1	6000	3	33.9
2	5966.7	3	31.7
3	4697.3	4	38.2
4	4436.8	4	27.7
5	4760	4	36.5
6	5072.8	4	33.5
7	5066	5	37.8
8	4446	5	34.6
9	3455.4	5	23.1
10	4781.4	5	37.5
11	3865.3	6	30.7
12	3447.8	6	32.6
13	3711	6	33.3
14	3448.2	6	27.6
15	4500.2	6	38.8
16	.	.	.

Answer 1